France's short-term repo market has stayed largely stable despite a sharp sell-off in government bonds, according to Bloomberg, suggesting the turbulence has not yet become a broader financial crisis. Hedge funds have been cutting exposure to French sovereign debt amid political and fiscal uncertainty ahead of the 2027 presidential election, widening bond spreads and raising volatility. French repo rates have held around 12 basis points above the central bank deposit rate, according to CME Group data, only slightly above their three-month average. Market participants describe the situation as a crisis of confidence rather than a systemic funding breakdown, but the Banque de France has warned that high leverage and concentrated trades could amplify stress. Fitch and S&P rate France A+, while Moody's, which rates it higher, is scheduled to review the country later in October.
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